N.J. Stat. § 18A:66-189
The Division of Pensions and Benefits may, in its sole discretion, qualify the alternate benefit program under section 401(a) or 403(a) of the federal Internal Revenue Code (26 U.S.C. s. 401(a), s.403(a)). In such a case, all contributions to the retirement annuity contracts shall be made as soon as the employee is eligible and has filed application forms required by the annuity carrier. No employer contributions under these contracts shall be vested in the employee until after the employee commences the second year of employment unless the employee, at the time of initial employment, either (a) owns a retirement annuity contract or contracts determined by the Division of Pensions and Benefits to be substantially similar to the contracts to be purchased under the alternate benefit program and issued by the designated insurers or mutual fund companies, or (b) is a member of another State-administered retirement system.
To the extent that any contributions required by this section would exceed the limits established pursuant to section 415 of the Internal Revenue Code, the contributions shall not be made to a plan which has been qualified under sections 401(a) or 403(a) of the Internal Revenue Code. Instead, the excess contributions shall be made to a section 403(b) plan established by the State to the extent that those contributions would be permitted to the plan in compliance with any provisions of the Internal Revenue Code and, in the event that there are remaining contributions, they shall be made to a nonqualified annuity plan established and maintained for this purpose. The participant shall be liable for any federal income taxes on contributions made to this plan.
N.J.S. § 18A:66-189